Will the great unemployment begin in August?

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The Guardian has noted this afternoon that:

Businesses will have to pay at least a fifth of the wages of furloughed employees from August, it has been reported.

The chancellor, Rishi Sunak, is expected to announce next week that employers will have to begin contributing as the lockdown is eased further, according to the Times.

Employers will be permitted to take furloughed workers back part-time, and all employers using the coronavirus job retention scheme will be required to make the payments, even if they remain closed, according to the paper.

I am not very surprised by this: it has been widely reported that Sunak has been fighting No. 10 on lockdown because the Treasury is petrified of the cost of keeping the economy closed. That said, the crassness of the move is to be wholly expected, and this needs explanation.

The logic of furlough was very straightforward. The intention was to take the cost of employing staff off employers, whilst keeping those staff in an employment relationship when their employer was forced, through circumstances beyond their control, to lay them off as they were unable to trade in anything approaching a normal fashion. Given that it was deemed necessary to lock down the country, and socially distance (and I believe that this was appropriate) then the logic of  furlough was sound: it was an attempt to put people into limbo whilst preserving the capital of the companies that employed them.

Even with this arrangement in place, we know that many companies have suffered enormous losses, and have only survived because they have been provided with the loan facilities, backed by the government, to try to cover their cash flows as money has haemorrhaged from them to cover remaining overheads.  Like it or not, this was the cost of maintaining the so-called free-market when only the state was able to preserve it.

But now, Rishi Sunak is running scared of the deficit, because the Treasury has told him that deficits are very bad things, even though they're not. And so he has announced that employers, who have not been told that they can trade again, and who have been offered no further funding, must now pay some of their staff's costs.

Why now? Because there is still time to start issuing legal notices on redundancy consultation for the beginning of August now: that's why.

And in many cases those redundancy notices are going to be given. Employers who have not been told if they can reopen as yet, and many more employers who are quite reasonably aware that demand for their services will be down massively when reopening happens because the services they supply are optional to other companies, in the sense that they represent expenditure that can be deferred, will have no choice when told that they have to pay their staff's wages again but make many people redundant. It will be that or face an inability to survive as a company as a whole.

This government is already, in my opinion, running a policy of herd immunity on coronavirus that accepts that a great many people will die from Covid 19. Nothing else explains their approach to a great many issues, like the failure to track and trace whilst choosing to reopen schools which will inevitably increase the R rate. I think they are indifferent to the cost: as Dominic Cummings put it not so long ago, grannies dying is just a price to pay as far as they are concerned.

Now the policy of pursuing herd immunity in the private sector is to begin as well: the cull of the jobs and companies that the government obviously thinks we can survive without will start.

I suspect that what might come to be called the great unemployment will commence. And the government will deny any responsibility for it, whilst putting no plan in place as to how those left without employment are to work in the future.

If this change to furlough had been announced alongside a commitment to a join guarantee in the Green New Deal it would make sense. But it has not. Furlough is to end, and with it millions of jobs, and there is no plan for anything else.

The reality of the coronavirus crisis for employees, and the indifference of the government to their plight, is about to become apparent to many. And the consequences may well be horrible, and totally avoidable.

So no-one please say Sunak is having a good crisis: when he's going to crash the economy in the absence of any plan for the future that's the last thing he's having. A great many people are going to change their minds about him very soon.